Interest rates are expected to rise in 2022—here are 4 ways to prepare (via CNBCMakeIt)
Federal Reserve Board Chairman Jerome Powell speaking at a re-nomination hearing of the Senate Banking, Housing and Urban Affairs Committee, on January 11, 2022, in Washington, DC., you might be worrying that interest rate hikes could affect your finances.
The federal funds rate, which is set by the central bank, is the overnight interest rate at which banks borrow from one another. It also influences the, which is what lenders use to determine how much interest you'll pay on credit cards, mortgages and other loans. When the federal funds rate goes up, the prime rate tends to follow.
For now, there are some money moves you can make while the benchmark interest rate is still hovering at aroundYou could find mortgages with around 3% interest for most of 2021, but the Mortgage Bankers Association is predicting that rates willFor a 30-year mortgage on a $300,000 home, the difference between 3% and 4% would be an additional $147 per month.
If you have an adjustable- or variable-rate mortgage that's already testing the limits of your monthly budget, you might want to refinance to lock in a fixed-rate mortgage to mitigate the uncertainty of rising rates. But make sure youSimilarly, a home equity line of credit, or HELOC, is closely linked to the Fed's benchmark rate, so you might want to shop around and convert from a variable rate to a fixed-rate loan if you have one.
If you have a private loan and are considering refinancing, you "should look into pulling the trigger sooner rather than later to try and take advantage of the current rates," Betsy Mayotte, president of
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